CBD Oil: Does it violate the prohibition on illegal activity in your condominium bylaws?

Michigan is one of the most progressive states when it comes to decriminalizing marijuana use for medicinal and recreational purposes.  Accordingly, it should be no surprise that cannabidiol (“CBD”) oil is becoming commonplace on supermarket shelves and in other retailers in Michigan.  As discussed in Recreational Marijuana: How will it impact Michigan Condominium Associations, marijuana is still illegal under federal law and presents a risk to condominium associations that expressly permit marijuana use in their condominium bylaws at the present time.  This article will discuss the legal differences between the use of CBD oil and marijuana as they may need to be treated differently by a condominium association depending on the language of the condominium bylaws.

 Legal status of Marijuana

Michigan decriminalized medical marijuana when it enacted the Michigan Medical Marihuana Act in 2008. Similarly, in 2018, Michigan decriminalized recreational marijuana when it enacted the Michigan Regulation and Taxation of Marihuana Act.  However, marijuana remains illegal under federal law and expressly authorizing the use of marijuana on property, even by somebody who is not the ultimate user, is a violation of federal law. Specifically, 21 U.S.C. 856(a) of the Federal Controlled Substances Act (the “CSA”) provides as follows:

(a) Unlawful acts

Except as authorized by this subchapter, it shall be unlawful to—

(1) knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance;

(2) manage or control any place, whether permanently or temporarily, either as an owner, lessee, agent, employee, occupant, or mortgagee, and knowingly and intentionally rent, lease, profit from, or make available for use, with or without compensation, the place for the purpose of unlawfully manufacturing, storing, distributing, or using a controlled substance.

(b) Criminal penalties

Any person who violates subsection (a) of this section shall be sentenced to a term of imprisonment of not more than 20 years or a fine of not more than $500,000, or both, or a fine of $2,000,000 for a person other than an individual.

Under the Michigan Condominium Act and Administrative Rules, a condominium association is “….responsible for the management and administration of the common elements, property, easements, and the affairs of the condominium project.”  Mich Admin R 559.502(1); See also MCL 559.103(4).  Accordingly, there are potentially stiff penalties for condominiums and associations, along with board members, who violate the above provision of the CSA, even if there are low odds that the federal government will take enforcement action.

In the context of medical marijuana, federal courts have also thus far held that federal law preempts state law and that there are no special exceptions for medical marijuana use. See e.g. United States v Canori, 737 F3d 181, 184–85 (2d Cir 2013) (“Marijuana remains illegal under federal law, even in those states in which medical marijuana has been legalized. See 21 U.S.C. § 903 (providing for preemption where ‘there is a positive conflict between [a provision of the CSA] and that State law such that the two cannot consistently stand together’).  While medical marijuana may be technically illegal, Congress has continually defunded the ability of the Department of Justice to prosecute people that strictly comply with state medical marijuana laws through the Rohrabacher-Farr Amendment in various appropriations bills  Accordingly, federal courts have issued injunctions against medical marijuana prosecutions when a person has strictly complied with the medical marijuana laws in their state. See e.g. United States v McIntosh, 833 F3d 1163, 1176–77 (CA 9, 2016).  However, as will be discussed below, CBD oil has a different status under federal law, and condominium associations may want to differentiate between permitting marijuana use and the use of CBD oil.

Legal status of CBD Oil

Michigan is one thirty-eight (38) states that have adopted laws that have legalized the use of cannabidiol (“CBD”) oil in some fashion.  On December 28, 2018, Michigan amended its public health code to permit the use of CBD oils.  MCL 333.7106 now provides in pertinent part:

…(2) “Industrial hemp” means the plant Cannabis sativa L. and any part of that plant, including the viable seeds of that plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9-tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis. Industrial hemp includes industrial hemp commodities and products and topical or ingestible animal and consumer products derived from the plant Cannabis sativa L. with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.

….

(4) “Marihuana” means all parts of the plant Cannabis sativa L., growing or not; the seeds of that plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant or its seeds or resin. Marihuana does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from those stalks, fiber, oil, or cake, or any sterilized seed of the plant that is incapable of germination. Marihuana does not include industrial hemp.

However, unlike the traditional use of marijuana, the federal CSA was also amended in 2018, through the 2018 Farm Bill, to permit the use of CBD oil.  21 U.S.C. 802(16)  now states as follows:

(B) The term “marihuana” does not include

(i) hemp, as defined in section 1639o of title 7; or

(ii) the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

Like Michigan law, 7 U.S.C. 1639o now defines “hemp” as follows:

(1) Hemp. The term “hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

Accordingly, while there are various federal regulations as to the growth of hemp, transportation of hemp and/or inclusion of hemp into food products that are regulated by the FDA, which are continually evolving, there is nothing presently illegal about using CBD oil, so long as the CBD oil is in strict compliance with the above statutes.

Conclusion

The Michigan Condominium Act, specifically, MCL 559.165 states that, “Each unit co-owner, tenant, or nonco-owner occupant shall comply with the master deed, bylaws, and rules and regulations of the condominium project and this act.”  Given that the use of CBD oil is a new fad, it is unlikely to be specifically addressed in most condominium bylaws.  Rather, many condominium bylaws contain a standard provision that prohibits “illegal” activity.  For example:

No illegal or offensive activity will be carried on in any Units or on the Common Elements, Limited or General, nor will anything be done which may be or become an annoyance or a nuisance to the Co-owners.

Accordingly, while a Michigan condominium association could likely rely on the above bylaw provision to prevent marijuana use in violation of federal law, it would not be able to rely on the above provision to prevent the use of CBD oils that strictly complied with federal and state law.  As a practical matter, most condominium associations will not see a need to prevent the use of CBD oils by a co-owner, as they are unlikely to cause a nuisance to other co-owners often association with smoking marijuana. However, condominium associations should be aware that unless the condominium bylaws expressly ban CBD oil, or that a co-owner is using a CBD oil with a higher concentration of THC than legally permitted, that the association will not likely be able to prevent a co-owner from using CBD oils.   Rather, a condominium association seeking to prevent co-owners from using CBD oils would likely need to amend the condominium bylaws to expressly restrict such an activity pursuant to MCL 559.190.

Kevin Hirzel is the Managing Member of Hirzel Law, PLC and concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. He has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2019, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel has been named a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine in 2018 and 2019, an award given to less than 5% of the attorneys in Michigan each year. He represents community associations, condominium associations, cooperatives, homeowners associations, property owners and property managers throughout Michigan. He may be reached at (248) 478-1800 or kevin@hirzellaw.com.